Facebook could be launching their very own cryptocurrency after reports revealed that the social media giant is looking for ways to leverage blockchain, the technology behind virtual currencies such as bitcoin and ethereum.

This news comes months after Facebook banned all cryptocurrency adverts in an effort to fight fraud and Twitter and Google soon took similar action, restricting all cryptocurrency initial coin offerings (ICOs), cryptocurrency exchanges, wallets and trading advice.

The management reshuffle has resulted in David Marcus, the former Head of Facebook Messenger, announcing that he will lead an exploration into blockchain after rumours emerged that Mark Zuckerberg was interested in doing the same.

On May 8, 2018, former Vice President at PayPal David Marcus, revealed via Facebook post that he will be taking on a new challenge after working with Facebook Messenger for four years.

He said: ‘I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.’

Days later, Facebook issued a statement amid speculation about this alleged new blockchain division and said: ‘Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.

‘This new small team will be exploring many different applications. We don’t have anything further to share,’ the spokesperson said.

Mark Zuckerberg also alluded to blockchain in his 2018 New Year Facebook post with the mention of ‘decentralization’.

‘A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people's hands. (The first four words of Facebook's mission have always been "give people the power".)

‘Back in the 1990s and 2000s, most people believed technology would be a decentralizing force. But today, many people have lost faith in that promise.

‘With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it.

‘There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people's hands.

‘But they come with the risk of being harder to control. I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.’

Facebook started experimenting with blockchain in 2017, when Morgan Bellen, part of the company’s corporate development team, was the only employee studying the technology.

In addition to this, in 2009, Facebook’s exploration with virtual currencies resulted in the launch of Facebook Credits, where users could purchase virtual goods in games such as Farmville. However, lack of success led to the social media giant exiting this particular market.

Many believe that Facebook could use blockchain technology as a way of solving recent privacy concerns, as CEO of blockchain-powered social network for professionals Indorse Gaurang Torvekar revealed.

‘While there are other cheaper and faster alternatives for protecting user privacy, blockchain allows the users to control their data end-to-end. This might be an attractive use case for Facebook, considering the recent Cambridge Analytica scandal.’

This follows former White House advisor Gary Cohn’s prediction that there will be a global cryptocurrency in the future and he expects to see a virtual currency reach worldwide mass adoption.

‘I’m not a big believer in bitcoin. I am a believer in blockchain technology,' Cohn said.

A cryptocurrency, otherwise known as a digital currency or a virtual currency, can be described as such, because it is just that, virtual money. Like any other currency, a cryptocurrency can be used to purchase products and services electronically and traded digitally, according to Coindesk.

As the BBC explained, a cryptocurrency, for example bitcoin, should be thought of as a computer file, which is then stored in a ‘wallet’ application on a smartphone or computer.

‘People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain,’ the BBC explained.

Because data is recorded with blockchain technology, this ensures the security of transacting this currency as the history of the cryptocurrency is retained and cannot be spent unknowingly or lost, cannot be copied and the transaction cannot be undone, unlike cash.